What is the Transfer Tax (ITP) and how is it calculated?
The Transfer Tax This tax is levied on the purchase of used homes, the signing of rental contracts and other legal transactions that are not subject to VAT. It is a tax of autonomous community competence, which means that each autonomous community establishes its own tax rates within the margins set by the State.
Transfer Tax
The ITP is applied in three main cases:
- Buying and selling second hand propertiesWhen you buy a property from a private individual rather than from a developer.
- Leases of housing and premisesThe tenant must pay the ITP when formalizing the rental contract.
- Documented legal acts and corporate transactions.Such as the increase of capital or the incorporation of companies.
The taxpayer, i.e. who must pay it, varies depending on the transaction carried out.
Taxable income and tax rates
The calculation of the ITP is based on the real value of the property or right transferred. In the case of a real estate sale or purchase, the cadastral reference value is usually the minimum to declare. Each autonomous community establishes its own tax rate, although the range usually oscillates between 6% and 10% of the value of the value of the home.
For example:
- Andalusia: 7% (general rate).
- Catalonia: 10% (general rate).
- Madrid: 6% (general rate).
Practical calculation examples
If you buy a property in Marbella with a reference value of 500.000 €500,000, the ITP would be calculated as follows according to the tax rate of 7% in Andalusia:
500,000 € × 7% = 35,000 € of ITP.
In other communities with a rate of 10%, the tax would amount to 50.000 €.
When do I have to pay the Transfer Tax?
The ITP must be paid within a specific period of time from the date of the transaction. Failure to do so on time may result in financial penalties.
Deadlines and procedures
The general term to liquidate the ITP is of 30 working days from the signature of the contract or public deed. The payment must be made at the tax office of the corresponding autonomous community, presenting the form 600The purchase deed or contract and the proof of payment.
Penalties for late payment
If the payment of the ITP is delayed, the Tax Authorities will apply surcharges and penalties. These can be:
- Surcharge for late filingBetween 1% and 20% depending on the time of delay.
- Interest on late paymentApplicable if the debt is not paid within the indicated term.
- FinesIn cases of total omission, the penalty can range from 50% to 150% of the amount owed.
Who pays the ITP in a real estate sale and purchase?
The buyer is responsible for paying the ITP in the sale and purchase of a used property. The seller, on the other hand, does not have to pay it, although he may be subject to the payment of the ITP. municipal capital gain.
Special cases and exemptions
Some transactions may benefit from reductions or exemptions in the payment of ITP:
- Young people under 35 years of ageIn many communities, they can access a reduced rate if they buy their first home.
- Large familiesIn some regions, they may be taxed at 4% instead of the general rate.
- People with disabilitiesThey can also access to special bonuses.
Do I have to pay ITP on a lease?
Yes. What many people do not know is that the leasing contracts are also subject to the payment of ITP, although the amounts are usually lower than in a sale and purchase.
ITP in lease contracts
The tenant is responsible for paying the ITP when formalizing the rental contract. The taxable base is calculated based on the total rent agreed in the contract.
The applicable rates are fixed and depend on a state table that establishes the tax according to the duration of the contract. By way of reference, a contract with a rent of 12,000 per year you would pay around 40-50 € of ITP.
How ITP is settled in leases
The tenant must file the form 600 and pay the tax at the regional tax office. In practice, this procedure is rarely complied with and the Tax Authorities do not usually pursue non-payment, although in the event of an inspection they could claim it.
Tips and recommendations for ITP compliance
Importance of professional advice
The ITP can vary according to the autonomous community and the circumstances of the buyer. To avoid surprises, it is advisable to count on the advice of an expert in real estate taxationespecially in high-value transactions.
In Marbella, where the luxury market is predominant, the amounts to be paid can be high, so proper tax planning is essential. proper tax planning can make all the difference.
Required Documentation
To settle the ITP, the following documentation is required:
- Contract or deed of the transaction (sale or lease).
- Form 600 completed.
- Proof of payment at the bank.
DNI or NIE of the buyer or tenant.
ITP is key
The ITP is a key tax in any real estate transaction involving the purchase and sale of second-hand homes or leasing. Its correct liquidation avoids penalties and problems with the Treasury. Since it is a regional tax, its economic impact varies depending on the community, so expert advice is essential to optimize the investment and avoid mistakes.
At Decoluxe Real Estatewe are specialists in real estate consultancy in Marbella and we help you with all the necessary steps for a safe and efficient purchase. If you need more information, contact us and we will guide you through the whole process..
